Ghana passes 2022 Income Tax Amended Bill

Ghana's Parliament has recently passed the 2022 Income Tax Amended Bill, extending the exemption from tax on gains from the realization of shares listed on the Ghana Stock Exchange for five years. This move is aimed at encouraging investment in the stock market and promoting its growth. Abdullah Ali-Nakyea, Director at Ali-Nakyea and Associates, explains that the tax exemption will make it easier for individuals to trade on the stock exchange, thus fostering investment and market development. The bill seeks to revert to the previous tax exemption status after a brief period of being subject to taxation, as the government aims to attract more investors to the market. However, there are concerns regarding the impact of revenue loss to the state due to capital gains trading on the exchange, especially amidst the country's strained government revenues. The bill covers a range of areas beyond the stock exchange, prompting questions about the timing of tax exemptions during times of fiscal challenges. Despite this, proponents believe that the tax exemptions will keep the market vibrant and competitive, drawing investors and facilitating economic growth. There is anticipation about the potential positive effects of the bill on the market, compared to other African countries like Nigeria and South Africa where similar exemptions exist. While feedback on the bill is still pending as it has not been fully rolled out, there are expectations that it will stimulate market activity and attract investment. However, critics have raised concerns about the speed at which the bill was passed, citing the need for thorough stakeholder engagement and careful consideration for bills related to revenue and taxation. The urgency of the bill's passage has sparked debates over the necessity of such rapid decision-making in economic matters, with calls for more measured and consultative approaches to ensure the effectiveness and longevity of the legislation.